An irrevocable life insurance trust (ILIT) is a legal entity designed to hold a life insurance policy for the benefit of designated beneficiaries, making the policy’s death benefits exempt from estate taxes. This trust cannot be altered or revoked once established, providing an effective way to manage tax liabilities and ensure that the proceeds are distributed according to the grantor's wishes. By removing the life insurance from the grantor's taxable estate, ILITs create potential tax savings and offer greater control over how assets are distributed after death.
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